Anti-tobacco legislation making its way through Olympia would close a downtown small business, as well as many others around the state, if passed into law.

Senate Bill 6564, sponsored by Sen. Karen Keiser, D-Kent, and Sen. Rodney Tom, D-Bellevue, would ban cigarette-rolling machines at stores that sell bulk tobacco.

For business owners like Casey Kroesser, the owner of DIY Tobacco in downtown Port Orchard, the legislation would be a death knell.

“If this bill went through it would close us down,” she said.

But stopping the proliferation of tobacco is more important than saving local businesses that operate these machines, Keiser said.

“I’m sorry if they’ve built an entire business solely around a product that is an addictive, health-harming product,” she said in a phone interview Tuesday. “That was their choice.”

Kroesser’s shop at 170 Harrison Ave. is sparsely decorated, although there are leather couches and a big-screen TV for customers while they wait. A small counter displays bins of hazel-colored tobacco and cartons of empty cigarette tubes.

To many, the shop would appear a typical convenience store, if not for a large brown box whirring with activity in the back of the shop.

The machine, a fast-action cigarette roller, is rented by customers who buy bulk tobacco and empty cigarette tubes to make their own smokes.

“It’s easy to do,” said DIY employee Jessica Rieber, 18, who works at the store in the afternoons. “I love teaching people how to use it.”

It’s easy and it’s cheap. According to Kroesser, a carton of 200 cigarettes would cost $60-90 at a convenience store or gas station. But at her store, 200 rolled smokes cost about $32, a saving of around 50 percent or more. Savings, Kroesser said, that smokers are hungry for.

“When I buy $100 worth of tobacco, you have to pay $195 because of taxes,” she said. “Over half of the cost is tax. It’s ridiculous. The cost of smoking is so high that some people have resorted to growing their own tobacco.”

Kroesser realized about a year and a half ago that smokers were desperate for an inexpensive alternative to store-bought cartons. She decided to open DIY Tobacco in December last year. She has since opened stores in Silverdale and Bremerton, employing a total of 12 people. There are 65 such stores around the state.

Cheaper cigarettes, however, have raised eyebrows. At the beginning of the 2012 legislative session, house and senate bills were introduced that would have classified the rolling-machine operations like DIY Tobacco as manufacturers, increasing the amount the stores would have to pay in taxes.

Then last week, the language of the senate bill was changed to outright prohibit use of rolling machines in stores such as DIY.

“I think they (DIY stores) will become very popular everywhere if we don’t stop them,” Keiser said. “It’s a way for people who are hooked to cigarettes to get them at a lower cost.”

Keiser, the chair of the Health and Long-Term Care Committee in the senate, said she would “make tobacco illegal if possible.” But in lieu of making cigarettes illegal, she will make them harder to find at low prices.

“I cannot abide that we allow proliferation and this operation,” she said.

Kroesser is outraged that the government would legislate her store out of business. Her store, she said, offers a desirable product at a competitive price.

“This is less freedom and squashing more small businesses,” she said.

She speculated that the legislation has been lobbied for by Big Tobacco firms such as Phillip Morris, which are afraid that cheaper tobacco undercuts their monopoly. Keiser said she didn’t doubt this was possible, but said it has no effect on her decision to sponsor the bill.

The Korean Grocers Association recently filed a complaint with the Washington State Liquor Control Board that tobacco shops with roll-your-own machines had made their “sales drop dramatically” and that the tax loophole was unfair to businesses who have to pay the cigarette tax, said TK Bentler, spokesman for the Washington Association of Neighborhood Stores.

“I have no doubt that the tobacco world has strange bedfellows,” she said. “I take actions to support policies that improve public health.”

Roll-your-own cigarette machines do affect other stores in the area. The Korean Grocer’s Association filed a complaint two months ago with the Washington Liquor Control Board that tobacco shops with roll-your-own machines had made their “sales drop dramatically,” and that a tax loophole that made cigarettes still cheaper to buy unpackaged was unfair to businesses who have to pay the cigarette tax, said T.K. Bentler, spokesman for the Washington Association of Neighborhood Stores.

The senate bill was referred to the Labor, Commerce and Consumer Protection Committee on Tuesday. A House bill that would change the classification of stores like DIY to be considered manufacturers of cigarettes, essentially putting them out of business because of the increase the stores would pay in taxes, passed out of the house committee on Business and Financial Services on Tuesday, and was referred to the the Ways and Means committee.

In the meantime Kroesser, who flew to a meeting of tobacco retailers in Las Vegas this week, waits on the fate of her business.

“You kind of expect if you do good business, your business will thrive,” she said. “You don’t expect the government to come in and shut you down.”